To Seed Or Not To Seed; Hay Growers Ponder

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Growers around the country have been trying to determine how many acres they’ll devote to hay production in 2012. High hay prices, competing-crop opportunities, rising input costs, memories of last year’s rough growing season, market uncertainties and more are playing roles in their calculations. Here’s how three commercial growers are approaching the decision-making process:

Minnesota – A challenging growing and marketing year in 2011 makes it unlikely that Jim and Butch Cardinal of Cardinal Brothers Hay in Hugo will return about 200 acres planted to small grains (part of their rotation) to hay production this year. Instead, the ground will likely go into corn or soybeans.

Typically, the Cardinals devote 500-600 acres to alfalfa-orchardgrass and timothy-orchardgrass, packaging most of it in small square bales. Horse owners within 80 miles of the Minneapolis-St. Paul metro area make up their primary market.

“It was a tough year all the way around,” Jim Cardinal says of 2011. “On the hay crops, it was too wet early and not wet enough late in the year. Sales were down, too. With the economy in the toilet, a lot of horse owners either cut back on how much hay they were buying or sold their horses altogether. A couple of the large barns in our area went out of business.”

The weather was tough on small-grain crops, too. “They got put in late and came out late, and we had a tough time with weed pressure,” says Cardinal. “We’re hoping that, by planting corn this year, we’ll be able to get a better handle on the weeds before rotating back into alfalfa. If we have another wet spring like last year and can’t get into the field with corn, we’ll probably go with beans. Overall, with hay sales being down, we figured this would be a good year to have that ground in a grain crop.”

Mild winter weather also will play into the Cardinals’ final planting decision. “We never got really cold temperatures for any extended period, and we had nothing for snow. We won’t know for awhile yet how that affected the alfalfa plants and whether we’ll have to do some replanting in a few spots. We’ll know a lot more by June 1.”

Washington – Chep Gauntt of Kennewick and his son, Drex, farm 2,000 acres. Besides corn, wheat, timothy and sweet corn, they also grow alfalfa. But alfalfa ground was pared back from 1,400 to 850 acres in 2011. They don’t plan to bring that land back to alfalfa in the immediate future.

“We had a rough year in 2010,” says Gauntt, past president of the Washington State Hay Growers Association. “The weather really beat us up on our first and fourth cuttings. It was a disaster. We had about two-thirds of our ground in alfalfa. That’s when we decided we needed to be more diversified.”

The fact that prices for other crops were on the upswing made the decision easier. “We weren’t able to get a contract for sweet corn in 2010 when the economy was so flat,” says Gauntt. “Last year, though, we got a good contract. At the same time, wheat prices were okay, and the corn price was strengthening.”

Besides weather issues, growing and harvesting four alfalfa cuttings is more time- and labor-intensive than planting, spraying and harvesting one crop of corn, Gauntt says. Marketing is easier, as well.

“If I have a bin full of corn, I can call someone up, load the truck and have my money in five days. With hay there are times you can’t sell it at any price. If you’re selling hay to a dairy, they’re likely going to want terms where they pay you a small percentage down and the balance over several months. Our feeling is that, as long as corn is selling for around $200/ton, why deal with as much hay?”

South Dakota – Early season flooding helped Gary Smith decide to reduce alfalfa acreage on his Mission Hill farm from 900 to 150 acres last year. “We had about 300 acres that never got planted because it was so wet,” says Smith. “The rest of what came out of alfalfa went mostly to corn.”

This year he plans to return around 500 acres to alfalfa. “We really have to have it for our rotation,” says Smith, a former National Hay Association president. He puts up most of his hay in 3 x 3 x 8’ bales; dairies in the Upper Midwest and beyond are his primary market.

Smith’s also not convinced that corn prices will stay as high as many market watchers are predicting. “Everyone is talking about corn prices climbing. But a lot of times when you hear that, it just means things are about to go in the other direction, and corn gets cheap in a hurry.”

Alfalfa hay prices in his region are likely to stay favorable for the foreseeable future, he thinks. “There’s absolutely no carryover out here. The high-quality hay is all gone. I’m feeling good about the market coming on.”

He’s “a little concerned” about reports that many dairy producers are seeking out cheaper alternatives to alfalfa in their rations, but believes the trend will be short-lived. “When you get right down to it, alfalfa is still pretty cheap compared to other feedstuffs. There’s always going to be a market for high-quality alfalfa hay.”